Gone in 146 seconds: Japan's investors race to buy SoftBank bonds

Monex Group Inc.’s online brokerage sold out ¥500 million ($4.6 million) of SoftBank Group Corp. bonds to individual Japanese investors in less than three minutes earlier this week, a sign of strong demand for the conglomerate’s debt despite skepticism about some of the company’s recent investments.

Tokyo-based Monex started selling the bonds at 9 a.m. on Monday and ran out two minutes and 26 seconds later, said Shinichiro Yamada, general manager in the firm’s products department. That’s despite Typhoon Faxai’s impact on trains, airplane schedules and other infrastructure in the greater Tokyo area.

It takes the brokerage about two weeks to sell out on average.

SoftBank founder Masayoshi Son has relied heavily on local investors, particularly individuals, to raise capital as he has expanded into wireless services and, more recently, investments in startups like Uber Technologies Inc. and WeWork.

SoftBank is raising a total of ¥400 billion in the most recent bond sale by Monex and other brokerages, pricing the seven-year notes at a 1.38 percent interest rate. It sold another ¥500 billion of bonds in April.

“The quick sellout, despite the typhoon, shows how strong the demand is for higher interest rates,” Yamada said in an interview. “We have sold IPO shares online before and now we see it’s convenient for investors to purchase the bonds through the internet too,” he added, comparing the latest sale to initial public offerings, or IPOs.

SoftBank has drawn skepticism recently because of its heavy investments in WeWork, the co-working startup that is stumbling in its push to go public. Though the company had at one point been valued at $47 billion, WeWork may have to cut that to as low as $15 billion to complete its own IPO. That could hurt the value of shares held by SoftBank, which has pumped more than $10 billion into the company.

SoftBank hired 12 brokerages for the bond sale, including local securities firms and online brokers. Nomura Securities Co., the nation’s biggest brokerage, is handling ¥90.5 billion of the bonds. Monex joined the syndication for the first time.

Investors buying the SoftBank bonds were relatively older, with men outnumbering women, according to Yamada. About 300 clients in their 50s and 60s, from Hokkaido to Okinawa, bought the products at Monex.